ISLAMABAD: Finance Minister Ishaq Dar presented budget for fiscal year 2023-23 (FY24) on National Assembly floor.

On sector-wise Dar declared agricultural loans would be increased to Rs 2,250 billion. Rs 30 billion would be spent on converting 50,000 wells to solar energy. “All taxes and duties have been slashed on import of hybrid seeds,” he added.

Dar said defence expenditure is budgeted at Rs 1,804 billion, 15.4 percent higher than last year making up 1.7 percent of GDP. Government also slashed all duties on combined harvesters and rice seeders, planters, and dryers. “No taxes will be imposed on agribusinesses to get turnover of Rs 800 million,” he added. A sum of Rs 6 billion had been allocated for subsidy on import of urea fertliser adding that Rs 10 billion would be spent on mark-up free loans. On Information Technology and IT enabled services, he said government decided to continue policy of 0.25 percent Income Tax on IT exports till June 30, 2026. “Freelancer exporting IT services up to $ 24,000 per year will be exempt from Sales Tax registration and returns,” he added. Proposal of one-page tax return service for IT exporters, he said. “Exporters up to $ 50,000 are allowed to import duty free software and hardware worth 1 percent of their exports,” he added. Moreover, taxation system had been automated, he said. “IT sector has been included in small and medium enterprises.” Rs 5 billion had been allocated as venture capital fund for IT exporters, he said.

Sales Tax on IT services would be reduced from 15 percent to 5 percent in capital, he said. “Banks will be given 20 percent exemption on taxes on profits if they give loans for promotion of IT,” he added. Scheme would be rolled out to give professional training to IT graduates.

On industry and exports he announced establishment of Export Council of Pakistan under chair of PM. “Any online market place selling metals and minerals will be exempt from Sales Tax.” Minimum tax on all listed companies would be reduced from 1.25 percent to 1 percent.

5 percent regulatory duty on indigenously made synthetic filament yard would be slashed, he said. “Customs Duty of 20 percent on scrap has been decreased to 11 percentc,” he added. About foreign remittances, Dar said immovable property purchased by foreign remittance would be exempt from 2 percent final tax. “Diamond card will be issued to those sending remittances of at least $ 50,000,” he added. Card holders would be given non-prohibited license, gratis passport, preferential access to Pakistani embassies and fast track immigration at Pakistani airports On Higher Education Commission, government earmarked Rs 135 billion for promotion of higher education including Rs 65 billion for HEC and Rs 70 billion for development funds, he said.  “Pakistan Endowment Fund has been established with funds worth Rs 5 billion to award scholarships for deserving students,” he added.

Government would distribute 100,000 laptops among deserving students and Rs 10 billion would be spent for next year. “Rs 5 billion has been allocated for promotion of sports in education institutes,” he added.

Rs 5 billion would be allocated for women empowerment, adding that these funds would be spent on skill development, loans for businesses and tax exemptions for businesswomen.

Government proposed 50 percent reduction in taxes for income through businesses through AOP for startups starting after July 1, 2023. “Rs 10 billion have been allocated for arranging specialised training of youth.”

On construction, he said government would relieve builders of tax on business income by 10 percent or Rs 5 million (whichever is higher) if building are constructed after July 1, 2023. “Tax exemption have also been extended for year.”

For Benazir Income Support Programme he said BISP would be allocated Rs 700 billion. For Utility Stores Corporation, he said government allocated Rs 35 billion for providing targeted subsidy on food items. “Pakistan Baitul Maal will be provided Rs 4 billion for providing medicines to low-income strata.”

Moreover, he said Sales Tax on Unani medicines had been reduced to 1 percent, adding that 10 percent Regulatory Duty on import of used clothes had been slashed.

On energy Dar said government exempted import of raw material for batteries and solar panel inverters of Customs Duty. “Foreign suppliers will be able to store imported petroleum in bonded bulk storage-new storage established at zero Customs Duty,” he added.

Government reduced oil and gas prices that could potentially inflation down, he said. “Forex reserves will also increase,” he added. Government also announced over Rs 20,000 million for farmers. Government would not impose any new tax on industry in next year, he said.

Salient features

• Public Sector Development Programme: Rs1,150 billion, Health: Rs 13.10 billion
• Railways: Rs 33 billion, Water Resources: Rs 107 billion, Special Initiatives of Prime Minister: Rs 170 billion, National Highways Authority: Rs 157.50 billion, Conversion of Agricultural Tubewells to Solar Power: Rs 30 billion, National Food Security: Rs 8.85 billion, Women Empowerment: Rs 5 billion, National Heritage and Culture Division: Rs 540 million, Karachi Greater Water Supply Scheme: Rs 17 billion,Karachi Coastal Power Project: Rs 14.86 billion, Pakistan Atomic Energy Commission: Rs 26.10 billion,

Planning Division: Rs 24.89 billion, Poverty Alleviation and Social Protection: Rs 500 million, Ministry of Energy: Rs 54.55 billion, Climate Change: Rs 4.5 billion, Azad Jammu and Kashmir: Rs 60.90 billion, Merged Districts of KP: Rs 57 billion.

Targets

Economic growth: 3.5pc, budget deficit target: 6.54pc, primary surplus target: 0.4pc,

export target: $ 30 billion, remittances target: $ 33 billion, tax collection target: Rs 9 trillion.

Published in The Daily National Courier, June, 10 2023

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